Safety is the most important and only bottom line for our track; this article is an in-depth interpretation of this last bottom line, including:
1) What is a hardware wallet? When I put my assets in a hardware wallet, how much security do I actually improve?
2) Which is safer, a hardware wallet or a multi-signature wallet? What is the safest way to store assets?
3) Which hardware wallet on the market is safer and more user-friendly?
4) Ultimate hardware wallet security advice
Some time ago, I helped a friend successfully crack a hardware wallet that had been unable to be opened for many years, and recently, there have been many bigwigs whose assets have been stolen through phishing;
It also aroused my interest in the storage and security of assets;
Safety is the most important and only bottom line in our field. Safety is 1 and everything else is 0 after 1. If safety is not done well, no matter how much money you make, it may all be gone one day.
So how do you save your assets (I mainly refer to BTC assets here)? Here are some things I summarized after talking with many big names in the wallet industry;
By the way, I would like to thank @KeystoneWallet Head of Product @bc1Bill and several other friends who do not wish to disclose their names;
1️⃣What is a hardware wallet? When I put my assets in a hardware wallet, how much security do I actually improve?
I believe this is the most concerned issue for all friends who use hardware wallets, but in fact, most people don’t understand this very well.
There is a common sense mistake here. After asking around, I found that many people think that once the assets are in the hardware wallet, they are absolutely safe and they can sit back and relax.
In fact, this is not the case. Hardware wallets are not absolutely safe!
First, you need to understand the essence of a hardware wallet, which is a physical device used to store cryptocurrencies and other digital assets.
Let me explain it in simple terms:
You can think of it as your safe; your wallet password is the password of the safe;
The private key is the ultimate tool that can restore your assets if your safe is lost;
Therefore, the main purpose of hardware wallets is to provide advanced security to protect users' private keys and sensitive data from cyber attacks, malware or physical theft. They generally have the following features:
1) Security enhancement:
Hardware wallets usually contain a security chip or chips that are specifically designed to protect the security of private keys. Private keys never leave the device unless the user explicitly authorizes a transaction.
2) Offline storage:
This type of wallet usually operates offline, greatly reducing the risk of possible attacks through the Internet. The wallet will only connect to the network when a transaction is required.
3) User control: Unlike online wallets or trading platforms, hardware wallets give users full control over their private keys and funds. This is in line with the cryptocurrency community's philosophy of "owning your private keys means owning your wealth."
So overall, hardware wallets offer a higher level of security than software hot wallets, exchanges, or online wallets, but this does not mean that additional security measures are not needed.
For example, in terms of asset storage, your private key does not touch the Internet, so the security is relatively higher. In terms of signing, hardware wallets require more steps, so you may be able to better identify scams;
But if your essential problem is your security habits and usage habits, you leave your private keys everywhere, and you never look at the signature content when signing, and just click with your eyes closed, then your security has nothing to do with whether you use a hardware wallet or not, you are in an unsafe state.
So, to put it in a lower level, what I want to say is: when you put your assets in a hardware wallet, how much security you actually improve depends on your usage habits, not the hardware wallet itself;
2️⃣Is hardware wallet safer or multi-signature safer? What is the safest way to store assets?
First of all, as mentioned earlier, our hardware wallet is a safe, the password is the key, and the private key is the ultimate recovery tool. If we need to protect our assets, we must:
1) Protect my private key (the ultimate magic weapon)
2) Protect my safe
3) Protect my safe password
The core here is still the private key; whether it is a hardware or software wallet, the core is your private key mnemonic. The security of your mnemonic determines your ultimate security; you need to know this;
But at the same time, your safe is also very important, whether it is a mobile phone, bank app, hardware wallet or software wallet; you must protect the safe;
But many people ignore this point and think that the loss of the safe (hardware wallet) is not a big problem. We have helped crack more than a dozen wallets. In fact, the possibility and success rate of cracking hardware wallets are there. Imagine a scenario where I am your acquaintance, I know where your hardware wallet is, and I know your common password habits. Once I take away your hardware wallet (safe) and crack it, you are actually in great danger;
Let me first talk about the conclusion. After discussing with several experts, everyone agreed that if you want to achieve extreme security, the safest is hardware wallet + multi-signature;
If you want to be more extreme, you can use hardware wallets of different brands + multi-signature;
For example, you can choose a combination of Ledger, Trezor, Bitbox, Keystone, and Coldcard: leger+ Keystone+ Trozer; you can create a 2/3 or 3/3 multi-signature.
In this way, you need three hardware devices + three private keys to store your assets. If you store these three in different locations and store them properly, it will be difficult for others to obtain them at the same time. The possibility of theft is minimal.
Other methods, such as the sharded mnemonic function launched by @KeystoneWallet, are also worth studying if you are interested. I think the security is also very good. It divides the mnemonic into multiple parts, and each part cannot restore the wallet alone. Only when these parts are correctly combined can the wallet be rebuilt.
It is equivalent to completing multi-signature in one wallet:
3️⃣Which hardware wallet on the market is safer and more user-friendly?
This is also a point that everyone is concerned about, but the same old saying applies: there is no equipment or system that is always safe, because the vulnerabilities of human nature are unpredictable;
So everyone has their own opinions. At present, we have cracked the following cases: Trezor, onekey, coldlar, imtoken mobile phone, Bitcoin wallet.dat;
Ledger is the largest brand in the industry, and it is a leader in terms of updates and security, but the Ledger system is closed source, so no one has claimed to have cracked the Ledger password system. But the problem is that it is closed source. For a closed source system, you are always afraid that they may do evil things inside.
I have used Onekey and Coldlar for a while. They have been widely promoted, but because I have encountered many cases of hardware cracking, and their hardware and software development capabilities still need to be verified by the market, I did not use them as a separate wallet in the end, but used them for multi-signature.
I bought some hardware for testing. In the next period of time, I will do a series of hardware wallet tests and tutorials for everyone. While helping me understand the wallet, I hope it can also help everyone. Everyone can look forward to it!
4️⃣ Ultimate hardware wallet security advice
Here are some suggestions for you regarding safety:
1) No matter what safe (hardware wallet device) you use, do not let anyone know where your safe is;
2) Do not let anyone know the password of your safe (hardware wallet); whether the safe is a mobile phone, bank app, hardware wallet or software wallet;
3) Try to choose a security chip that can protect against physical attacks: Some high-end hardware wallets may also have anti-tampering features that can automatically destroy private keys or block transactions when a physical attack is detected.
4) The most important thing is to keep your private key in a place that is not known to anyone. You can either save it with multiple signatures or encrypt your private key again.
To sum up: safety is no small matter, don't be afraid of trouble;
Finally, let me repeat: there is no device or system that is always safe, because the vulnerabilities of human nature are unpredictable; you need to deeply understand the meaning of this sentence;
I hope everyone can preserve their assets and never lose them;
Of course, if you really lose your password and have no idea what to do, come to me, maybe I can help!
